We model group formation as a response to relative deprivation. We employ a simple measure of relative deprivation. We show that the process of deprivation-induced self-selection into groups reaches a unique steady state. We study the social welfare implications of the deprivation-induced...

Enabling educated individuals to work abroad entails a brain drain and results in educated unemployment at home. Because the prospect of migration raises the expected returns to higher education it also facilitates a "brain gain": a eveloping economy ends up with a higher fraction of educated...